What’s In a Name? That Which We Call Capital Controls
IMF Working Papers, February 12, 2016
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- What’s In a Name? That Which We Call Capital Controls
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Bibliographic details
- Authors: Atish R. Ghosh, Mahvash S Qureshi
- Published: February 12, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498332835.001
Authors and Publication
- By Atish R. Ghosh, Mahvash S Qureshi
- February 12, 2016
- IMF Working Papers, Working Paper No. 2016/025
- Issue: 025
- Volume: 2016
- Pages: 45
- DOI: https://doi.org/10.5089/9781498332835.001
- ISBN: 9781498332835
- ISSN: 1018-5941
- Citation preview format (Chicago): Atish R. Ghosh, and Mahvash S Qureshi. "What’s In a Name? That Which We Call Capital Controls", IMF Working Papers 2016, 025 (2016), accessed 9/18/2026, https://doi.org/10.5089/9781498332835.001
Research Question and Scope
- Investigates why controls on capital inflows have a bad name and evoke visceral opposition by tracing use and perceptions of capital controls since the late nineteenth century.
- Focus on historical experience and how perceptions evolved across advanced and emerging economies.
Core Findings
- Advanced countries often employed capital controls to tame speculative inflows during the last century.
- Several factors undermined the subsequent use of capital controls as prudential tools:
- Inflow controls became inextricably linked with outflow controls, leading to "guilt by association."
- Capital account restrictions tended to be associated with current account restrictions, making capital controls seem incompatible with trade liberalization.
- The shift from policy activism of the 1970s to free market ideology in the 1980s and 1990s led to disrepute of capital controls, even when used for prudential inflow management.
Mechanisms Behind Negative Perceptions
- Linkage between inflow and outflow controls:
- Outflow controls have typically been more pervasive, more stringent, and more linked to autocratic regimes, failed macroeconomic policies, and financial crisis.
- Inflow controls are therefore condemned by association with these more negative outcomes.
- Association with current account restrictions:
- As countries pursued greater trade integration, capital controls came to be viewed as incompatible with free trade.
- Ideological shifts:
- The decline of policy activism and the rise of free market ideology reduced the acceptability of capital controls in the 1980s and 1990s.
Subject Tags and Keywords (as provided)
- Subjects: Balance of payments, Capital account, Capital controls, Capital flows, Capital inflows, Capital outflows, Exchange restrictions, Foreign exchange
- Keywords: Bretton Woods, capital control, capital controls, capital flows, Capital inflows, Capital outflows, East Asia, emerging market, Europe, Exchange restrictions, financial crisis, Global, gold standard, hot money, inflow control, interwar period, net capital, outflow control, WP
Policy and Interpretive Implications
- Historical evidence suggests reputational and institutional linkages—not solely economic effectiveness—shaped attitudes toward capital controls.
- Distinguishing between inflow and outflow measures and separating capital account measures from current account restrictions may influence contemporary acceptability of prudential capital inflow management.
- Ideational shifts in policy paradigms can materially affect the use and legitimacy of capital controls.
Source: What’s In a Name? That Which We Call Capital Controls, IMF Working Paper No. 2016/025
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